Swiggy’s IPO Sets the Stage: High Expectations Amid Mixed Market Sentiment
Food delivery giant Swiggy’s IPO opens with moderate subscription rates and strong backing from institutional investors, aiming to raise ₹11,327 crore for tech upgrades, expansion, and more.
IPO Opens with Strong Initial Response
Swiggy’s much-anticipated IPO opened for public subscription on November 6, offering shares within a price range of ₹371 to ₹390. The three-day IPO, set to close on November 8, garnered a 12% subscription rate on its first day, with bids for 1.89 crore shares against the 16 crores available. The strongest demand came from employees, who booked 74% of their reserved portion, followed by retail investors at 54%, and non-institutional investors at 6%. Meanwhile, qualified institutional buyers (QIBs) showed minimal participation on day one.
Anchor Investors Show Confidence with ₹5,085 Crore Investment
In a major boost for the IPO, Swiggy secured ₹5,085 crore from anchor investors a day before the IPO launch. Notable investors such as New World Fund Inc., Government Pension Fund Global, Fidelity Funds, and BlackRock participated, with 13.04 crore shares allocated at ₹390 each. Of these, 5.3 crore shares went to 19 domestic mutual funds, a testament to Swiggy’s perceived value among institutional investors.
Fundraising Goals and Strategic Objectives
Swiggy’s IPO aims to raise ₹11,327 crore, with ₹4,499 crore from fresh issue shares and ₹6,828 crore via an Offer for Sale (OFS), which will see partial exits by investors like Accel India, Tencent Cloud Europe, and Alpha Wave Ventures. Swiggy intends to use the proceeds to strengthen technology and cloud infrastructure, increase brand marketing and business promotions, pay down debt, and finance acquisitions for growth.
Swiggy’s Blockbuster IPO Launch – Important Details
Grey Market Hints at Cautious Sentiment
Despite institutional interest, grey market trends indicate mixed demand, with Swiggy’s shares commanding a premium between ₹12 and ₹20, suggesting a listing gain of about 3-5%. Analysts speculate this may signal cautious optimism among retail investors amid broader market volatility.
A Look Ahead: Listing and Competitive Positioning
With shares expected to list on November 13 and allotment on November 11, Swiggy’s valuation could reach approximately ₹95,000 crore, positioning it as a formidable competitor to Zomato, which currently has a market cap of ₹2.13 lakh crore. Founded in 2014, Swiggy reported a net loss of ₹611 crore for the quarter ending June 2024, slightly higher than the ₹564 crore loss in the same period last year.
ACME Solar IPO: Must Know Details
Final Thoughts
Swiggy’s IPO launch is a landmark moment for India’s food delivery sector, offering insights into investor appetite and competitive dynamics within the industry.
Disclaimer:
This article does not constitute financial advice or an endorsement of investment in any funds, securities, or offerings mentioned. Readers are strongly encouraged to conduct their own research, assess their financial goals and risk tolerance, and consult with certified financial advisors before making any investment decisions. Investment in securities carries risks, and past performance is not indicative of future results. Practice caution and due diligence.